Friday, June 20, 2014

Professional real estate managerFabian Calvo expects the echo housing boom to persist, as long as easy credit is extended to virtually everyone who can sign their name on a mortgage. Nevertheless, the entire edifice / Ponzi scheme will eventually implode amid the enormous pool of upside down home debtors - nearly 10 million mortgage holders owe more than their houses are worth. Once the last mortgage is signed, institutions that purchased massive inventories of homes, thousands per month, at much lower prices will release the houses on the market. In addition, only 1 in 4 previously foreclosed homeowners ever purchase a house again - most rent for the rest of their lives. 7-10 million homes are sitting on the balance sheets of government-sponsored entities, such as Fannie Mae and Freddie Mac. Although the national unemployment rate has declined sharply, without the high paying, solid perquisite jobs from the pre-recession era, the resulting demand will force housing prices to return to equilibrium levels: 100 times the average monthly rent. To determine a safe purchase price for any home, multiply the average rent in the community for a similar property by 100 ($1,000 x 100 = $100,000 home value).

Head of the 35 year old gold brokerage McAlvany Wealth,David McAlvany is concerned that the global economy is facing collapse, which could usher in a period of inflation unlike anything seen in the Western Word in a 100 years. He asks why our officials are so concerned by deflation - lower prices make houses and related investments more affordable, giving the masses funds left over at the end of the month to invest, instead of requiring credit cards for purchases. He outlines a realistic portfolio plan for every investor to maximize wealth with minimal risk. By accepting the uncertainty of future economic events, investors can position their funds for profit optimization, regardless of the actual outcome. David advocates ignoring forecasts and instead dollar cost averaging into gold each month, to protect your purchasing power.

Wednesday, June 18, 2014

In his latest installment, the Silver Investor follows the Austrian Economic Model, showing how an increase in money supply is the only cause of inflation. He answers the question: given the Feds profligacy, where is the runaway inflation? The reason why hyperinflation is not yet apparent to the masses is that most of the dollars are tied up in bank balance sheets and floating around the globe. Once they are liberated and repatriated the velocity of money could explode, resulting in sudden hyperinflation on an immense scale. In addition, amid the wake of the 2008 credit crisis, officials say that the economy has recovered. However, David Morgan thinks that our financial institutions failed to learn any lessons, continuing to apply excessive leverage via derivatives. Put paper silver securities in abeyance, which are merely promises that will evaporate and disappoint when the end game unfolds - instead consider bullion and shares, which have no liens and retain their value in difficult environments. It's just a matter of time before the currency collapse comes to pass and demand for gold and silver reaches infinity. At that point, Bob's your uncle for precious metals investors. David outlines his intrinsic value calculation for silver - approximately $100 per ounce.

The head of Euro Pacific Capital and Euro Pacific Gold Fund (EPGFX) says the latest stimulus by the ECB, which resulted with a negative benchmark rate (-0.10%), is inflationary and bullish for gold. Much of the metals sold during the retracement were absorbed by deep pockets, with the intention of holding for the long haul and much higher prices. The net impact is a demand bottleneck that could pose big problems for short sellers, resulting with a short squeeze to the delight of gold bulls. The yellow metal posted a low last July and then re-tested it in December. Nonetheless, during the latest pullback, bears were unable to test either level. This price convergence is strongly bullish, especially given the sharp gold price rally this week. Government officials will pull out all the stops ahead of the upcoming elections to insure that voters are wearing rose colored economic glasses. He expects a new wave of monetary expansion - stimulus, creating the perfect melange of factors for higher precious metals prices. Considering a home purchase? Caveat emptor. Peter Schiff and the host ask cui bono - who benefits? The housing rebound appears to be a fata morgana, a mirage fomented by profligate stimulus efforts, low rates, government loans and Fed based MBS purchases, designed to lure in the unsuspecting public just before institutions unleash their huge inventories, causing the next 2007-like meltdown, trapping a fresh slew of unsuspecting mortgage buyers in overpriced McMansion debt shacks.

Tuesday, June 10, 2014

The editor of the Trends Journal thinks that it's time to end external entanglements and rebuild the country; the 700+ US military bases located around the globe is an excessive figure. Instead of suffering wounded limbs, minds and hearts, our honorable troops must be evacuated, returned home and offered adequate training to reenter the modern workplace. As warriors of revival, the military can restore the crumbling domestic infrastructure and economy. The initial cost of Operation Occupy PEACE will be offset by a sea change of improved opinion regarding the United States by the global community. American officials should take history lessons from the second largest economic superpower; China is following the original handbook of American success, building up the infrastructure, en passant creating solid engineering and managerial positions as well as facilitating corporate expansion, which creates even more high paying jobs. China is not only the world's largest gold producer, but last year imported as much gold as the world produced. It's been said that imitation is a high form of flattery; investors will be rewarded for mimicking China's passion for gold.

Senior Investment Strategist at Institutional Advisors, Bob Hoye returns with his latest market report. He thinks that the Fed has created two new bubbles; it's time for an equities / bond market retreat. Once the air is let out of the markets, funds will flow directly into the precious metals sector, creating solid profit opportunities. Bob is not an inflationist, on the contrary his ontological outlook includes a long-term dollar rally. Nevertheless, the gold / silver ratio suggests that once price finds support, the Kodiak bear will make a hasty retreat to its grotto.